Earlier this year, management decided against the separation

October 1, 2014: PayPal is splitting from eBay and will become a separate and publicly traded company next year.

The decision comes almost a year after billionaire investor Carl Icahn opened a proxy fight pushing for the spinoff of PayPal.

“The industry landscape is changing, and each business faces different competitive opportunities and challenges,” said eBay president and CEO John Donahoe. The separation is expected to be completed in the second half of 2015.

California-based eBay said the separation was the best path for growth and shareholder value creation for each business.  Mobile payment technology is getting red hot, with Apple’s recent entry into the space. PayPal is available in 203 markets worldwide and is on track to process 1 billion mobile payments in 2014.

Shares of eBay soared more than 11% to $58.60 before the opening bell, close to its high for the year.